26 comments:

Hrm.... 68,000,000 acres is the amount of leased land that is owned by 8,608 different oil corporations in the United States. Only a small portion is owned by large corporations (Exxon has less than 1%). The median lease size is about 680 acres. Not all leases were obtained for the purpose of drilling oil. Many believe, or would have you believe, that 68 million acres is ripe for the taking, and that these thousands of companies are just sitting on their leases because of greed, as much sense as that makes... You'd have to look at each of the 8,608 companies reasons assuming they are not already exploring their leased land. To assert they are 'sitting on it' doesn't make any sense, from a business perspective or otherwise. With oil prices high, now would be the perfect time for these companies to capitalize on their leases. Yet this isn't happening, for any number of reasons.

This 68 million acres is being used to argue against drilling in ANWR, a 19 million acre vast Federally protected wilderness off the North Coast of Alaska. A proposal is in place to designate 8%, or 1.5 million acres, for drilling. The argument to drilling there is that the Porcupine Caribou Herd would be affected. Past drilling in Alaska not only didn't affect populations, they increased among caribou and grizzly bears.

Also if 68,000,000 Americans overinflate their tires all of the oil in the world will magically squirt out of the ground and into our strategic reserve and gas will become free.

Oil company profit margins are over hyped. If you want to go after them, there are a lot of other big businesses you should go after also. Just because they're higher than they've been doesn't mean they're unreasonably high.

A windfall profit tax is a bad idea. Studies in the past 25 years have shown that government makes more money off the oil companies in the form of current taxes paid to state, local and federal governments than the shareholders get. The 1980 windfall profits tax decreased production, which results in actually making us more dependant on foreign oil.

--snip--Amy Myers Jaffe, a fellow in energy studies at the James A. Baker III Institute for Public Policy just finished a two-year study looking at oil companies and how they spend their money.

The study found that for the five big international oil companies - ExxonMobil (XOM, Fortune 500), Royal Dutch Shell (RDSA), BP (BP), Chevron (CVX, Fortune 500) and ConocoPhillips (COP, Fortune 500) - spending on share buybacks went from under $10 billion a year in 2003 to nearly $60 billion a year in 2006.

Spending on developing their existing oil fields, however, went from about $35 to $50 billion, while spending on finding new oil fields went from about $6 billion to $10 billion.

"These companies are spending a very small amount of their operating cash flow on exploration," she said. "They are spending the majority of their funds buying back stock."--snip--

I'm saying that though there is a lot of land it's split up across a very large number of leases to different companies. It's not like there's this huge field and no one's doing anything with it. Some of it has been explored and doesn't have oil, some hasn't been explored.

But making a vague statement that we have all this land but aren't doing anything with it is misleading. You can't just force all 8000 companies to go out and explore. Many can't afford it. By imposing a time limit you're basically taking it from them, any this will be a big loss to many of the smaller companies.

A lot of land is allocated to all these little companies but all the allocations are quite small individually. Does that count?

And why would they hold a lease to federal land and pay the government if they dont have the money to explore it for oil?

How about this? No more oil company tax breaks or credits. A windfall tax on quarterly oil revenue larger than 20% of average growth over the sector and all that money gets given to the bottom 20% of oil producing companies to accelerate their growth? That sounds good to me :) Spread it around a little - hey it works for butter and you dont hear toast complaining!

Yeah sounds great! In fact, we should just set a maximum profit cap for every company in the world and divvy up the money amongst everyone else. Besides, its not really fair that they make all that money. After all, the oil industry's profit margins are pretty much average compared to many other major industries. That would be great for the economy if we would just punish successful businesses.

The oil industry actually has a larger profit margin than any other industry.

And I didnt say it was fair or not fair, good or bad. And I didnt say let's do this with all companies in all sectors.

But right now, where your argument fails is that there is NO economy without oil.

So what happens when we've finished off the world's oil? When we've drilled and polluted and pumped every last hill and valley where a drop or two could possibly be found? Should the government bail out oil companies who didnt expend enough on R&D to subsidize themselves in some other form? But I guess we do it for all the other big companies so why not for the oil companies too.

And dont tell me we do it to keep people from losing jobs, because if they're paying thru the nose in taxes to float the very companies they work for the argument just becomes cyclical.

Of course there is no economy without Oil. I never said anything about alternate energy being bad, I am all for it. The problem is it is nowhere near ready for primetime. Can you afford a hybrid? I can't. Neither can a vast majority of the American people. It's not feasible to shove Hybrids down everyone's throats yet. Incentivise them, fine, but we need to get more control over our current energy sources before we just start abandoning them.

We need to open up drilling domestically and let the principle of supply and demand go to work. We need to let Capitalism continue by giving our big businesses the opportunity to be prosperous, not overburden, regulate, and tax them into bankruptcy.

I remodeled my bathroom. Bathrooms are the devil. I put in a new tub, toilet, sink, floor, everything. I still have flashbacks occasionally.

If Exxon Mobil were a country, its 2007 profit would exceed the gross domestic product of nearly two thirds of the 183 nations in the World Bank's economic rankings.

The U.S. Energy Information Administration's most recent analysis of the oil industry's performance, released in January, showed oil industry return on equity of 27 percent—about 10 points higher than that of other manufacturers.

You know what's sad though? There are people out there that make money having discussions like we have on TV or in books. I think we're in the wrong business.

Cory, you are talking about those profits as though they are a bad thing. How much does exxon may in taxes? Everyone that gets rich working for Exxon pays taxes, buys crap, etc. There is a reason why the good ol' USA, a relatively infantile Country, is the most prosperous and powerful country in the world. If we start making profit into a bad thing we flush the principles of capitalism down the toilet and are headed for a very dark time.

Going by your own standards against the oil company, why wouldn't we go after the other big industries and start penalizing them for their success? This would be a very slippery slope.

Here is my solution for the energy crisis.We take those flashlights.You know.. the ones that you shake to power up.Strip out the bulb, wire them into the mainframe, and make it manditory that anyone who wanks straps one of them onto their hand.

Boom. Headshot. Energy crisis averted. I maintain that's how they generated all the electricity from the humans in the matrix.

I have restless leg syndrome. I could prolly power a small city by myself.

As Technology continues to advance, alternate energy will become more feasible, and naturally people will transition on their own. But it's not there yet. There is some amazing stuff coming around the bend with high capacity batteries and hydrogen, etc. It's going to be great. However, until it makes sense for Americans to transition to new technologies fiscally we have to get our hands around Oil prices and lessen our dependance on other countries for National Security reasons also.